International Markets and Zscaler (ZS): A Deep Dive for Investors

Have you evaluated the performance of Zscaler's (ZS) international operations during the quarter that concluded in April 2025? Considering the extensive worldwide presence of this cloud-based information security provider, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.While delving into ZS' performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.The company's total revenue for the quarter amounted to $678.03 million, marking an increase of 22.6% from the year-ago quarter. We will next turn our attention to dissecting ZS' international revenue to get a clearer picture of how significant its operations are outside its main base. A Dive into ZS' International Revenue TrendsDuring the quarter, Europe, Middle East and Africa contributed $203.02 million in revenue, making up 29.94% of the total revenue. When compared to the consensus estimate of $200.8 million, this meant a surprise of +1.11%. Looking back, Europe, Middle East and Africa contributed $192.91 million, or 29.77%, in the previous quarter, and $170.82 million, or 30.88%, in the same quarter of the previous year.Asia Pacific accounted for 15.83% of the company's total revenue during the quarter, translating to $107.35 million. Revenues from this region represented a surprise of +4.08%, with Wall Street analysts collectively expecting $103.14 million. When compared to the preceding quarter and the same quarter in the previous year, Asia Pacific contributed $102.82 million (15.87%) and $83.77 million (15.14%) to the total revenue, respectively.Other International generated $24.67 million in revenues for the company in the last quarter, constituting 3.64% of the total. This represented a surprise of +2.82% compared to the $23.99 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other International accounted for $23.78 million (3.67%), and in the year-ago quarter, it contributed $19.64 million (3.55%) to the total revenue. Prospective Revenues in International Markets The current fiscal quarter's total revenue for Zscaler, as projected by Wall Street analysts, is expected to reach $707.18 million, reflecting an increase of 19.3% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Europe, Middle East and Africa is anticipated to contribute 29.9% or $211.52 million, Asia Pacific 15.5% or $109.91 million and Other International 3.6% or $25.52 million.Analysts expect the company to report a total annual revenue of $2.65 billion for the full year, marking an increase of 22.2% compared to last year. The expected revenue contributions from Europe, Middle East and Africa, Asia Pacific and Other International are projected to be 29.9% ($791.3 million), 15.7% ($415.25 million) and 3.6% ($96.49 million) of the total revenue, in that order. Closing Remarks Zscaler's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.With an impressive externally audited track record, our proprietary stock rating tool - the Zacks Rank - harnesses the power of earnings estimate revisions and serves as an effective indicator of a stock's near-term price performance.Zscaler currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Reviewing Zscaler's Recent Stock Price Trends Over the preceding four weeks, the stock's value has appreciated by 19.6%, against an upturn of 6.1% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts Zscaler among its entities, has appreciated by 10.3%. Over the past three months, the company's shares have seen an increase of 32.1% versus the S&P 500's 0.5% decline. The sector overall has witnessed an increase of 1.4% over the same period.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zscaler, Inc. (ZS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks